Sweetcrude january 2015 by Vanguard Media Limited

Local content has given impetus for Nigerian companies to ramp up capacity…Emeka Ene P\10

Nigeria spends N736bn on fuel import in nine months P\15

A Vanguard Monthly Review Of The Energy Industry VOL 05

N0. 68

UPDATES MONTHLY BASKET PRICE

DEC-14 NOV-14 0CT-14 SEP-14 AUG-14 JUL-14 JUN-14 MAY-14 APR-14 MAR-14 FEB-14 JAN-14 DEC-14

60.23 75.57 85.06 95.98 100.75 105.61 107.89 105.44 104.27 104.15 105.38 104.71 107.67

Daily | Weekly | Monthly | Yearly

54.44 U$

110 108 106

JANUARY, 2015

Nigeria on the

brink over price slump, subsidy debacle

104 102 100 98 96 94 92 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

NERC decries irregularity in metering scheme

he Nigerian Electricity Regulatory Commission, NERC, has raised alarm over the irregularities in the metering scheme, adding that 50 per cent of Nigerian electricity consumers are yet to be metered. This was disclosed at a recent metering consultation in Port- Harcourt. The Chairman, Dr. Sam Amadi, said ‘the over 50 per cent electricity consumers were not metered and thereby subjected to the cruelty of estimated billings, popularly known as crazing billings in Nigeria.’

P\13

NLNG Sponsors 57 Nigerian Trainees in South Korea

Contents 3 07 10 12 15 16 18 20 23 24 25

COVER

Nigeria on the brink over price slump, subsidy debacle

OIL FG to deploy e-registration to check products adulteration

FOCUS

Local content has given impetus for Nigerian companies to ramp up capacity…Emeka Ene

GAS

Natural Gas price falls to four-month low

FINANCE Nigeria spends N736bn on fuel import in nine months

POWER Power: There is no going back to Egypt, FG declares TECHNOLOGY Horizontal directional drilling

LABOUR

TUC laments uncertainty over PIB as oil workers, FG seek way forward

INSURANCE 2014: Insurance of oil and gas risks minimal

SOLID MINERAL Nigeria needs mining stakeholders’ confab for workable roadmap

MARITIME

Naira depreciation will slow growth of the maritime industry

29 FEEDBACK 31 COMMUNITY

The social dimension of sustainability KEFFES communities, Chevron strengthen ties after years of bickering

Sweetcrude is a publication of Vanguard Media Limited

THE TEAM EDITOR Clara Nwachukwu CORRESPONDENTS Victor AHIUMA-YOUNG Godwin ORITSE Godfrey BIVBERE Jimitota ONOYUME Samuel OYANDOGHA Emma Arubi Michael Eboh Rosemary ONUOHA Sebastine OBASI Ediri EJOH HEAD, SPECIAL REPORT Ubong NELSON PAGE LAYOUT/DESIGN

Francis AYO & Johnbull OMOREGBEE

Enquiries Call: 08098051103

Printed and Published by

WEB:

Vanguard Media Limited. Vanguard Avenue, Kirikiri Canal, P.M.B. 1007, Apapa.

All correspondence: P.M.B 1007, Apapa, Lagos.

ore than 50 years a f t e r independence, N i g er i a i s s t i ll a m on o ec on om i c co u nt r y. I t h as continued to depend o n oil while neglecting other na tural r e so u r ce s as we ll a s t he manufacturing sector. This has not augured well fo r the country which prides itse lf as the biggest economy in Af rica. The last quarter of 2014 was dominated by issues o f oil price fall, which have sent shocking waves down the backbone of the coun try ’s economy. Sweetcrude went to work to find out the issues involv ed, which informed our c over titled; Nigeria on the b rink over oil price slump, sub sidy debacle. The year 2015 has just ro lled in. We must not fail to tha nk our esteemed readers who have kept faith w ith Sweetcrude. We hope this year will be more prospero us.

Cover Story

Queue at a filling station

Nigeria on the brink over price slump, subsidy debacle T BY MICHAEL EBOH

he continuous decline in the prices of crude oil i n t h e international market in addition to throwing up a number of challenges for the Nigerian economy, has also brought up yet another controversial issue the issue of petroleum subsidy removal. Nigeria’s fuel subsidy regime, which started with good intentions to end volatility of supply and stabilise domestic prices later metamorphosed into a drain pipe for the country’s resources, with the frittering away of billions of naira

by unscrupulous individuals. Specifically, as at the end of 2013, Nigeria has spent about N10 trillion on subsidy payments; between 2006, when the Petroleum Support Fund (PSF) Scheme kicked off and 2013. For 2014, the Federal Government budgeted N971.1 billion for payments of subsidy, keeping it at the same level with 2013. In the 2015 budget, the Federal Government showed signs of cutting down on subsidy, proposing N460 billion as subsidy for Premium Motor Spirit and N160 billion as subsidy for kerosene. Nigerians became aware of the irregularities in the subsidy

scheme, when a number of panels were set up to probe the scheme in 2012, after a failed attempt by the Federal Government to completely remove subsidy on petroleum products. Today, with the consistent decline in the prices of crude oil, trading around $60 per barrel, from about $110 per barrel a couple of months ago, questions are again being asked as to the actual price of petroleum products and how much Nigerians are supposed to be paying on these products. An enormous amount of the country’s resources appeared to have gone down the drain, especially with the lack of transparency in the subsidy

programme. In controversial and questionable circumstances, the Federal Government, a couple of days ago, disclosed that it withdrew $1 billion, about N170 billion, from the Excess Crude Account, to settle debts owed petroleum products marketers. Minister of Finance, Ngozi Okonjo-Iweala, who made this known during the presentation of the 2015 budget, stated that the clarification becomes necessary following allegations by Mr. Timothy Odaah, Chairman of the States Finance Commissioners Forum, that the funds are missing and could not be accounted for.

Odaah had raised an alarm that the 36 states and the Federal Capital Territory (FCT) were not aware of the whereabouts of the funds. Such controversies and many more have been connected to Nigeria’s petroleum subsidy over the last couple of years and provided a veritable avenue for the pilfering of Nigeria’s financial resources. Furthermore, the amount the country said it will be paying PMS importers in 2014 as subsidy is almost twice the amount allocated for education in the 2014 budget, which is CONTINUES ON PAGE 4

Cover Story

Nigeria on the brink over price slump, subsidy debacle

Fuel dispenser

CONTINUED FROM PAGE 3

N495.28 billion; more than three times the N262.74 billion budgeted for health; and 148 per cent more than the N655.47 billion allocated for the Universal Basic Education Commission, UBEC and the Tertiary Education Trust Fund, TETFUND. In terms of welfare, subsidy provisions in 2014 can pay the salaries and wages of about half the workforce of Ministries, Departments and Agencies, MDAs, at the federal level given the N1.723 trillion provided for personnel cost in the budget. However, despite calls for a reduction in the prices of petroleum products, the Petroleum Products Pricing Regulatory Agency (PPPRA), in a document obtained from its website, put the market price of PMS at N98.66 per litre, as at

December 19, 2014, compared to N108.38 per litre as at December 9, 2014 and N141 per litre in 2012 when attempt for a total removal of subsidy failed. The PPPRA put the amount paid as subsidy for the period at N1.66 per litre. According to the PPPRA, the Expected Open Market Price (EOMP) of fuel is N98.66; Landing Cost — N83.17; ExDepot price is N81.51 per litre, while the regulated price is N97 per litre. The PPPRA explaining the process of computing the market price of PMS, in its products pricing template, said it employs Import Parity Principle, which includes: landing cost of products; margins for the marketers, dealers, and transporters; jetty-depot Through-put; other charges and Taxes.

The PPPRA said the objectives of the pricing template are: transparency, full cost, recovery, fairness, responsiveness, efficiency and competitiveness. Nevertheless, despite the PPPRA’s claims, analysts are of the view that the current decline in the prices of crude oil has made it imperative for the Federal Government to discontinue the fuel subsidy programme and utilise the funds for more beneficial purposes. In addition, a number of economic analysts have issued stern warning that unless something urgent is done as regards subsidy and other measures, the Nigerian economy might be in a turbulent situation, due to the declining crude oil price. Specifically, analysts at BGL Research are of the view that

According to the PPPRA, the Expected Open Market Price (EOMP) of fuel is N98.66; Landing Cost — N83.17; ExDepot price is N81.51 per litre, while the regulated price is N97 per litre the declining oil prices and glut in the crude oil market have ex p o s e d t h e c o u n t r y t o exchange rate volatility and other economic risks. The analysts, in their ‘Nigeria Economic review and outlook for 2015,’ disclosed that the unfolding oil price scenario and the consequent exchange rate depreciation, official and unofficial by about 20 per cent

on the average, could translate to a higher inflation scenario in 2015. They said, “The reality in the economy suggest that monetary policy will be nonaccommodating in 2015. This would be dictated by the eventual trend of the oil price and the consequence effect on the gover nment primar y CONTINUES ON PAGE 5

Cover Story

Kerosene buyers

Nigeria on the brink over price slump, subsidy debacle CONTINUED FROM PAGE 4

balances, foreign exchange rate volatility and the foreign reserves. “The current level of external reserves at US$36.76 billion can cover seven months of import. However, this would deteriorate to below US$30 billion before the end of the second quarter if the oil price trend continues below the US$65 per barrel. “At that level, no monetary policy reversal is expected regardless of the pro-growth and pro employment stance of the Governor of the CBN. “Interest rate will therefore remain high for most part of 2015 with a potential for increase in Monetary Policy Rate, MPR, if macroeconomic stability is threatened. A

further increase to 14 per cent in late 2015 is plausible.” Also, analysts at Financial Derivatives Company Limited, led by Mr. Bismark Rewane, the Chief Executive Officer said that the decline in the global prices of oil has been met with mixed feelings as importers of refined petroleum products count their gains, and manufacturers lament the rising impact on the cost of funds and currency depreciation. According to them, the falling prices are, therefore, likely to lead companies to defer their Final Investment Decisions (FID), a decision that can hurt the global economy. They said, “Most oil exporting countries including Nigeria, Venezuela and Russia

are embarking on austerity measures. For example, further decline in oil prices may spur a total overhauling of the budget assumptions for 2015. This is because the 2015 budget benchmark oil price of $65 per barrel is above the current market price of crude oi l a nd m a y s ug g e s t a downward review of the benchmark figure.” Continuing, the analysts said, “Our outlook for inflation is unlikely to influence the exchange rates following its recent devaluation by eight per cent. However, the naira will continue to experience volatility at the interbank and parallel markets due to emerging and sustained demand pressures from foreign investors. “This will result in the

continuous depletion of the foreign reserves if the CBN sustains its currency stability drive. Also, the CBN is likely to take caution in depleting the external reserves as global oil prices remain low or decline further. “We estimate that the naira will trade within N183185/dollar at the interbank market against the dollar in the coming month.” Speaking in the same vein, Mr. David Adonri, Managing Director, Highcap Securities Limited, explained that the oil price slump has brought about an urgent need for the country to resolve the issue of subsidy on petroleum products. According to him, at current price of crude oil, I believe fuel subsidy may no longer exist; however, the opportunity has

come for the matter to be resolved once and for all. He maintained that fuel subsidy, has over the years, served as a major avenue for the depletion of the country’s foreign exchange reserves, as well as helped in no small measure in inhibiting Nigeria’s economic growth and development. Adonri said, “Fuel subsidy has remained a wrong economic policy for long. It is a needless consumption subsidy in a developing economy that requires massive production subsidy. Since importation accounts for higher quantity of fuel consumed in Nigeria, it is the major source of depletion of the countr y's foreign reserve. “Nigeria has comparative CONTINUES ON PAGE 6

Cover Story

Nigeria on the brink over price slump, subsidy debacle CONTINUED FROM PAGE 5

advantage in production of petroleum products. If the potential is properly developed through private sector capital formation, the country can end her import dependence and even become an exporter. Success of the Nigerian Cement industry in this regard demonstrates the feasibility of becoming a net exporter of petroleum products as well. “Nigeria is a mono-product economy which depends on crude oil export to survive. The economy is equally heavily dependent on imports for survival. It is not an economy constructed to withstand external shocks.” Continuing, he said, “As a result of the absence of a heavy industrial base, the country lacks domestic engineering infrastructure to foster import substitution through industrialisation. The long term solution to arresting the usual panic that greets every decline in crude oil price is reduction of the economy's import dependence. “Development of the engineering infrastructure is the critical factor required for Nigeria's industrialization and technological breakthrough. It is failure of the fiscal authorities to implement long term industrialization strategies that compels the monetary authorities to take brutal short term measures to tighten money supply and mitigate inflation that currency devaluation can provoke, each time crude oil income is threatened.” Also speaking, Mr. Patrick Okigbo, Principal Partner, Nextier Capital Limited, said, “We have always advocated the removal of fuel subsidy, especially as it has become evident that it is a source of

corruption and leakage to the economy. “The reality, however, is that the drop in international oil prices should translate to lower fuel pump prices. The fact that we have not seen a downward adjustment in fuel pump prices is an indication of

subsidy removal. ‎Commenting on the austerity measures introduced by the Federal Government in light of the oil price slump, Okigbo said, “It is a shame that we did not save up for the rainy days and we are now facing the perfect storm.

Fuel subsidy has remained a wrong economic policy for long. It is a needless consumption subsidy in a developing economy that requires massive production subsidy the inefficiencies in the market.” He, however, allayed fears that the removal of subsidy will have a negative impact on the country, noting that the drop in international oil prices is expected to make up for the increase in price from the

“We should have restructured the economy during the oil boom years and developed new engines of growth for the economy. We should have also cut back on recurrent expenditure during those years. Now, we have no option but to swallow the bitter pill of economic restructuring. “We know what to do. They are amply documented in many policy documents of the government. What we lack is the political will to drive the desired reforms. May be this economic malaise will provide the impetus to make those changes.” In a presentation titled, “Institutional and Legal Arrangements for Fuel Subsidy Regime,” Dr. Fatima WaziriAzi, Head of Department of Public Law at the Nigerian Institute of Advanced Legal Studies, NIALS, explained that the subsidy programme has revealed a new trend of corruption in Nigeria. According to her, it has witnessed situations whereby

people collect subsidy payments for not supplying petrol, whilst they collect foreign exchange for the purpose. Waziri-Azi said corruption in fuel subsidy ensures that the society loses in two ways, “First, some of the subsidies do not reach the intended beneficiaries, and second, the misused subsidy feeds the black economy.” H o w e v e r, p r o v i d i n g suggestion on ways to safeguard the economy against the shock of falling crude oil price, irrespective of fuel subsidy removal or not, Kate Isabota, an analyst at Dunn Loren Merrifield Asset Management and Research Company said, “Nigeria’s economic and political administrators should strongly consider evolving the current system into one that stimulates healthy competition, provides incentive compatibility to states to create their own revenues and increase the overall wealth of the nation.”

Oil

2015: Experts caution on policy issues in oil and gas

Oil and gas SEBASTINE OBASI

xperts and stakeholders in the nation’s oil and gas industry have cautioned government on the need to implement policies that would put the industry on a good pedestal in 2015. The Country Senior Partner for Price Waterhouse Coopers, Nigeria and the Company’s Africa Oil and Gas leader, Uyi Akpata said that though the industr y looks promising, government should remove the uncertainty associated with some regulatory issues. “The outlook for the industry is positive and operators can look forward to an exciting and dynamic future with an everchanging competitive landscape characterized by divestments and new acquisitions as new market entrants continue to seek a share of the industry ’s significant growth potential. “The onus however sits with government to ensure that they

continue to provide acceptable regulatory environments with attractive fiscal systems. The main difficulty that investors have is the risk associated with uncertainty. “Should uncertain regulations persist especially surrounding the passage of the PIB, the country might become less attractive to new investments which is considered very important in increasing the country’s revenue,” he said. The Director of Operations, I n d e p e n d e n t Pe t r o l e u m M a r ke t e r s A s s o c i a t i o n o f Nigeria (IPMAN), Mike Osatuyi said that government should deregulate the downstream subsector following the falling global crude oil prices. He explained that government should put in place adequate measures to cushion the effects of deregulation and protect the citizenry from the effect of the dwindling economic situation. According to him, the best time for the deregulation of the downstream sub-sector of the nation’s oil and gas sector is now that the crude oil price is low. “Deregulation could have

been the best automatic price adjustment mechanism that responds to the market forces without any need for intervention by the government. “Just as the price of crude oil is dropping and some countries, such as United States of America (USA), adjusted the price of petrol from three dollars to two dollars, the price mechanism in Nigeria should also be able to adjust to a reduction in the prices of refined products (petrol, diesel and kerosene),” he said. For Basil Ogbuanu, President, Nigerian Association of L i q u e f i e d Pe t r o l e u m G a s Marketers, NALPGAM, the nation should focus on its local content policy so as to encourage indigenous players in the industry. “The focus now and beyond 2014 should be for the federal government to embrace sincerely the local content development drive such that Nigeria's crude oil is refined locally, less of importation, total eradication of oil theft (which is actually possible) and less of capital flight. Most importantly,

Just as the price of crude oil is dropping and some countries, such as United States of America (USA), adjusted the price of petrol from three dollars to two dollars, the price mechanism in Nigeria should also be able to adjust to a reduction in the prices of refined products (petrol, diesel and kerosene)

the Petroleum Industry Bill (PIB) must be passed into law; for the much expected revolution to commence in earnest. At this point, we might be talking about the real “transformation agenda", he said. The President, L agos Chamber of Commerce and Industry (LCCI), Mr. Remi Bello, said that high inflation rate is a factor Nigerians will have to deal with in the incoming year. “A n a t u r a l o u t c o m e o f depreciating exchange rates is inflation for an import dependent nation like Nigeria. Cost -pushed inflation will be pronounced in the next few months. This will be driven by high cost of production and high cost of imported finished goods,” he said. Bello also explained that there would be decline in government businesses and high risk of payment default by government. “Businesses driven by government patronage are likely to experience a decline in the short term given the current government revenue outlook. Capital projects of governments will reduce drastically and this would affect some segments of the private sector. Other expenditure heads such as training and travels may also suffer major reductions. G e n e r a l l y, g o v e r n m e n t contractors would experience a slowdown in tempo of activities. “With declining revenue, the risk of default in payment for jobs executed for government agencies will be higher in the short term. This situation calls for cautious engagement with government contracts at all levels of gover nment. As government revenue contracts, the capacity to meet financial contractual obligations may be difficult. “With the current developments, many contracts, especially the medium to large ones will come with variations. Clearly the exchange rate depreciation will alter many cost parameters. This is a new challenge that many contractors and suppliers as well as their clients will have to confront. This will happen in public and private sectors,” Bello explained.

Oil

FG releases Q1 2015 fuel allocation to marketers ...pays N166bn outstanding subsidy claims

Gas station

he Federal Government has approved the release of first quarter (Q1) 2015 allocation to marketers for the importation of petroleum products into the country. A statement issued by the Petroleum Products Pricing Regulatory Agency (PPPRA), said the early release is in furtherance of the government's resolve at ensuring continuous products supply in the system, aimed at sustaining the serenity in the d o w n s t r e a m i n d u s t r y. According to the statement, the Executive Secretary of the PPPRA, Mr. Farouk Ahmed, while calling on motorists not to engage in panic buying, assured that, "there is ample supply of petroleum products in the

country and discharges and truck-out had continued in spite of the holidays and the festive periods". The PPPRA further explained that apart from facilitating an improved national Premium Motor Spirit (PMS) supply and stock build-up, the latest effort is also to enable marketers make adequate preparations towards products sourcing and importation early in the New Year. The PPPRA attributed all the proactive initiatives put in place at ensuring products availability across the nation, to the support and direction of the Minister of Petroleum Resources. The Agency on their part, is committed to prompt processing of documents for all imported products duly brought into the country, says Mr. Ahmed.

The Petroleum Minister had commenced a regime of early release of quarterly PMS allocations in addition to supplementary allocations to complement the national demand. According to the PPPRA, the approvals, apart from providing additional imports to supplement the prevailing stock level in the system is now responsible for the sustained availability of petroleum products across the country at regulated prices. Also, the Federal Government has approved the payment of about N166 billion to petroleum marketers as reimbursement for outstanding subsidy claims. According to sources at the Federal Ministry of Finance, the payment is for batch I to part of batch M. However, the other part of batch M, and batches N, O,

According to the statement, the Executive Secretary of the PPPRA, Mr. Farouk Ahmed, while calling on motorists not to engage in panic buying, assured that, "there is ample supply of petroleum products in the country and discharges and truck-out had continued in spite of the holidays and the festive periods

and P to the tune of N105 billion are still at the Debt Management Office (DMO) awaiting payment. This part payment is geared towards ensuring stability in the fuel

supply as well as to encourage banks and other financial institutions, which were hitherto, reluctant in issuing letters of credit to finance petroleum products importation.

Oil

Oil vessel

Asia pricing-war hotspot for African, Gulf oil producers BY EDIRI EJOH

sia has become a hotspot for a p r i c e w a r between African and Gulf oil producers who, hobbled by bulging global supplies and waning demand, are offering steep discounts to defend their market share in the world’s top net crude buying region. The competition is welcome news for Asian buyers. If oil stays near $60 per barrel, import costs for the world’s No2 oil consumer, China, would drop to under $125 billion a year, versus $222 billion in 2013 when crude averaged $110. But for producers it means more competition, and African sellers like Nigeria and Angola, faced with precarious finances due to plummeting oil prices, are struggling to make inroads into Asia, a Middle Eastern stronghold. “There is competition between West African and Middle East suppliers for the Asian markets, but the Middle East suppliers have the cost advantage,” said

Philip Andrews-Speed, head of Energy Security Division at the National University of Singapore. The city-state is a major oil trading hub in Asia. Low operating costs in Saudi Arabia, Kuwait and the UAE already allow these countries to offer hefty discounts. Now, a more than 50 per cent jump in freight rates between West Africa and China since September is adding to the relative advantage of Middle Eastern grades, which require shorter shipping distances to Asia. This has been a big setback for West African producers. Almost half of Nigeria’s cargoes due to be exported in January are still available and the backlog has pushed Nigerian oil differentials versus Brent to their lowest since at least 2009 at 65 cents a barrel, down 80 per cent since May. West African exports got a brief boost in August when Brent’s premium to Middle East crude narrowed to less than $2 per barrel from almost $5 in June. But with Middle Easter n producers now offering even more competitive prices, the

advantage has faded. “A year ago, a $2 premium would have been attractive, but in today’s environment it’s different,” a trader dealing with West African crude said. We s t Af r i c a n p r o d u c e r s traditionally sold most of their oil to North America and Europe, but exports dwindled given a gusher of shale oil from the United States and higher output from nations outside the Organisation of the Petroleum Exporting Countries (OPEC). West African crude exports to Asia rose more than four per cent between January and December, Reuters data shows. China accounted for most of the rise as it took advantage of low prices to build up oil reserves. But the higher West African arrivals into Asia were mainly due to sales before October, and have dropped since then due to Middle East discounts. Middle East producers continue to dominate the Asian oil market, with Saudi Arabia, the UAE and Kuwait all increasing shipments to the region since 2012. The Middle East accounts for

Egypt pays BG $350m outstanding debt

G Group Plc received $350 million from the Egyptian government as part of the country’s commitment to pay back outstanding debt to the energy industry. The payment reduces BG’s domestic receivables balance to about $920 million, the company said . Egypt said in October it would repay $1.5 billion of debt owed to foreign energy companies with savings from a recent reduction in fuel subsidies and proceeds from a planned bond sale. The country ran up debts to companies including BG and Dana Gas PJSC (DANA) as public finances deteriorated amid the political turmoil following the Arab Spring uprising of 2011. BG has been impacted by the reduction of LNG exports from Egypt, it said. The Reading, England-based company lifted only one LNG cargo in the country in 2014. It is investigating options to increase the supply of gas and is working with the government on resolving the outstanding receivable balance.

around half of China’s imports and Africa has a 25 per cent share. With pricing an advantage for Gulf producers, one hope for West Africa is China’s drive for diversification in order to avoid over-reliance on Middle Eastern oil, JBC Energy said. But analysts are sceptical about the sustainability of steep discounts as producers need

higher prices to finance their budgets. “Governments that underpin their budgets with oil or metals have seen currency values plummet, reserves erode or current account deficits rise ... Regimes built on oil wealth will come under pressure,” risk consultancy and insurance brokerage JLT Group said in its 2015 outlook.

F The year is gone. If you take a look from January till now, do you think the expectations of the industry have been met? The Nigeria oil servicing industry is maturing. It’s an indication that local industry initiative has come to stay. People have recognized that this is not a passive trying but positive things are happening. More and more independent operators are coming to recognize that to thoroughly grow capacity you can no longer do it from palm flash point of view. We have seen companies like Shell, Agip, NCDMB collaborating with PETAN on initiatives that seem to create ``win-win’’ scenario. This is a long term view. What happened this year and last year is setting pace for sustained growth for oil servicing companies in Nigeria over the next decade, because infrastructure is being built, capacity is been run, irrespective of availability of contract and staff, but with a realisation that as far as oil industry in Nigeria goes, there is potential for growth. Therefore we can invest.

Focus

Local content has given impetus for Nigerian companies to ramp up capacity…Emeka Ene

Are you not worried that this may affect investment in the sector which may lead to loss of contract by indigenous service companies?

To what extent has the Federal Gover nment supported local capacity In Nigeria ? I think that more than anything, we need to recognize and applaud this government for taking the bold step to pass the Local Content Act. I think this is laudable. The reality is that the passage of the Act was a good initiative and that is the impetus for local Nigerian companies to begin to ramp up capacity. That is the bottom line, to a large extent that has created a spring board for growth in the whole sense. There are certain things lined up which could position Nigeria as a strong country over the next 20 to 30 years. The first is local content and gas master plan which created a basis for real gas market, privatising power will grow Nigeria economy. PIB will also create long term investment. The Naira has depreciated. Do you think it has any implication on Nigeria ’s

For obvious reason, the dollar is the currency of choice in oil transaction. If the price is high, there are more dollars. If there are more dollars, then there are more dollars to spend, and if you spend more dollars, they will weaken in value. This is supply and demand scenario. Now, you bring it closer home, when the dollar gets stronger, because of the lower rate price, there is automatic pressure on the naira to get weaker because it gives proportional interest in that context so, to a large extent, a stronger implication weaken naira except it can be sustained artificially. However, I think that due to local content in the past oil pricing there is less impact on local services. Today, you have local capacity created by local content. There is local capacity to generate employment. Therefore that will help to sustain or downplay the weakening of the naira.

Emeka Ene

ngineer Emeka Ene is the Chief Executive Officer of Oildata Wireline Services Limited and Xenergi Limited, both leading technical service companies operating in the Nigerian oil and gas industry. At the Petroleum Technology Association of Nigeria, PETAN, award ceremony held recently, he talked about various issues in the oil and gas sector. Excerpts, as reported by Sebastine Obasi.

crude export, as well as import of petrol? One has to place this against

the geo-political nature of our industry and by extension, the naira. You see, the price of oil and the value of dollars at the

inter national market is inversely proportional. In other words, when the oil price drops, the dollar gets stronger.

It is interesting that the current crash price is not creating the panic within the industry that previous crashes have generated, which is a good sign. It means that the industry is matured. However, you have to understand that Nigeria ’s oil today is not as cheap as it was 15 years ago. The reality today is that cost of production of Nigeria ’s oil is within 20 to 30 dollars per barrel or more. The circle of ups and downs is good. It allows efficiency to be built in. It allows companies to re-strategize on how to deliver services quicker, better and faster. I think to a large extent the opportunity that Nigerian companies had should be increased because all companies now want to get more values and they are not ready to open up their cheque books and sign without asking for values rendered. CONTINUES ON PAGE 11

Focus

CONTINUED FROM PAGE 10

We reckon that Nigerian content and Nigerian companies will actually get busier with the support of regulators and policy makers. Some stakeholders have said that the survival of the oil industry depends on PETAN, what role do you think you have played to justify such confidence?. PETAN continues to provide leadership. We advocate on behalf of the industry, not just Nigerian companies. PETAN advocates on what is good and best for the industry, both from operators, Nigerians and international companies’ point of view. That is the reality of it because, we are in the same boat. We want to continue to provide services that are world class for operators that want to get world class values for the dollar they pay service for. We want to encourage and continue to encourage investment. In that regard, PETAN’s leadership role in the industry is participatory, collaborative and incisive. We recognized that for the industry to keep growing, we h a ve t o m a x i m i z e loc a l availability of services. In this period where return on investments is declining, do you think investment in Free Trade Zones is the best for PETAN companies and how do you think it can be spread across the regional zones in the country? Historically, China economy grows at least 100 per cent on the creation of special economic zones. At the time it encourages trade across their borders. To a large extent, FTZ in Nigeria enables investments. It is safe heaven for investments. Across Nigeria , you find out that FTZs are clustered in Lagos , North and no one single FTZ in the South-Eastern part of the country, out of 30 FTZs in Nigeria . It’s ironical because most people from South-East are industrialists and one expects that such initiative will strive in the area and I do want to commend the president for approving first FTZ in Enugu 2013. It is very commendable.

Emeka Ene

Local content has given impetus for Nigerian companies to ramp up capacity…Emeka Ene How come we have not seen any kind of activity since the FTZs were conceived? I believe that the promoters of the projects on FTZs know of the long term viability. These things are subject to lots of scrutiny. l must commend the current minister for Trade & Investments, because he brought some level of professionalism to investment that was missing in the past, which may account for why many FTZs in the past had not succeeded. Investors are ready to invest to establish long term viability. It is our expectation that before the end of the year, the authority in charge will give approval for the zones to take off. That will create another centre of industrial activities

Where Brazil is generating 1000 Giga watts, Nigeria is doing 5 Giga watts. Now, what that means is that with the amount of power today if all the gas that is produced in Nigeria is put to produce power it will only produce 32 giga watts potentially that can support the oil and gas industry. Are investors not worried that the presidential approval is oral. What is the fate of lock down investments considering that funds continue to accumulate,

partners are beginning to run out of patience. Foreign investment partners are also losing confidence, is delay not dangerous in this case? In terms of time frame, it can be frustrating. However one thing we have recognized is

that, to get to this level and point of approval, there is need to protect the interest of investors and partners. Yes we have few who had lost interest in the past, yet we have few who had built confidence in the zone, simply because they have committed their fund. Some of them have also tested the model available prior to getting to the project. We have had interest in the projects as far as Australia , China , India , Czech Republic , USA manufacturing solar panels. We have companies that want to set up fertilizer plants. We have companies that want to manufacture various electrical and generating equipment within the zones. All of them are making their plans on the available opportunities of the region, not just Nigeria but surrounding regions, West Africa , and East Central Africa in terms of ability to export their products into these areas. In terms of energy factors that will drive the economy in the region, do you think that FTZs can accommodate viable investment in power generation and oil and gas? Nigeria today has about 170 million people. Brazil is about 109 million. They produce 2 million barrels of oil per day. Nigeria does 2.4 million on a good day but the difference is that Nigeria produces 5 per cent of the power that Brazil generates. Where Brazil is generating 1000 Giga watts, Nigeria is doing 5 Giga watts. Now, what that means is that with the amount of power today if all the gas that is produced in Nigeria is put to produce power it will only produce 32 giga watts. The implication is that even if you have 10 Orient energy companies, they will not go near touching the potential in capital market. Can you imagine if we are producing 50 giga watts today, it will transform our manufacturing sector. To d a y, m a n u f a c t u r i n g companies start from the scratch. They have to get their power on ground zero, while FTZ provides infrastructure so that you will only come with briefcase to start manufacturing.

Gas

Natural Gas price falls to four-month low Ediri EJOH with Agency report

atural gas tumbled to a f o u r- m o n t h low in Europe as Ukraine paid its debt to Russia, reducing the risk of disruptions to flows from the continent’s biggest supplier. Front-month prices reached the lowest levels since August in the United Kingdom. and the Netherlands, Europe’s largest markets, broker and exchange data showed. NAK Naftogaz Ukrainy said December 24 it paid an outstanding debt to OAO Gazprom and said a week later it pre-paid for January shipments. Twice in the past decade Russia began the New Year by cutting off flows of the heating fuel to Ukraine. Russia supplies about a third of Europe’s natural gas, half of which flows through Soviet-era pipelines crossing Ukraine. European gas prices fell more than 20 percent in 2014 as the mildest year on record left storage sites the fullest since at least 2009, according to Gas Infrastructure Europe, a lobby group in Brussels. Oil’s bear market also pushed prices lower as Russian gas sales are indexed to crude with a time lag. “As Ukraine paid back its debt and pre-paid some additional Russian volumes, the market is now more relaxed and looking at the storage overhang and the oil price going down,” Thierry Bros, an analyst at Societe Generale SA in Paris, said. “This is impacting negatively gas prices.” U.K. gas slid as much as 3.3 percent to 48.15 pence a therm ($7.44 a million British thermal units) on ICE Futures Europe, the lowest since Aug. 28 for a front-month contract. The

A gas facility

As Ukraine paid back its debt and pre-paid some additional Russian volumes, the market is now more relaxed and looking at the storage overhang and the oil price going down equivalent Dutch price retreated as much as 3.2 percent on the Title Transfer Facility hub to 20.60 euros ($24.81) a megawatt-hour, the lowest since Aug. 29, according to broker data compiled by Bloomberg. Russia cut gas supplies to Ukraine in June as fighting escalated between pro-Russian rebels and government troops. Flows restarted in December after the European Union brokered an interim deal, settling price and debt issues through the winter heating

season before a court in Stockholm makes a final arbitration decision. European gas broker, traders and analysts are betting on lower prices for U.K. and Dutch fuel for a fourth week, according to a Bloomberg survey of 13 respondents. Central and western Europe will have above-normal temperatures in six to 10 days, f o r e c a s t e r M D A We a t h e r Ser vices in Gaithersburg, Maryland, said.

CLP Holdings sales of two China units lapse

ower generator CLP Holdings Limited said the sales of its two China units lapsed after it failed to complete the internal restructuring of a unit before the deadline. The Hong Kong-listed power company said in April CLP China agreed to sell CLP China Tianjin and CLP China Shenmu to CA Holdings Ltd. for 2.25 billion Chinese yuan ($366 million). CLP China had received $36.5 million as a deposit from the buyer. CLP said in the statement that the completion of the deal was subject to finishing an internal restructuring, which didn't take place before Dec. 31 as required because the company hadn't finished certain registration requirements. The company said it would refund the deposit to the purchaser without interest and any additional liability. CLP said the lapse of sales would not result in any material adverse effect on the business operations and financial position of the company.

Gas

HYUNDAI SAMHO HEAVY INDUSTRIES

Hyundai Samho Heavy Industries

NLNG Sponsors 57 Nigerian Trainees in South Korea BY EDIRI EJOH

ifty-seven y o u n g Nigerians, sponsored by N i g e r i a Liquefied Natural Gas, NLNG, the country ’s liquefied natural gas exporter, have left for the East Asian nation of South Korea towards mastering a shipbuilding, repair and construction course. Their training comes as one of the important elements of NLNG’s contract to procure six new ships from worldrenowned shipbuilders, Hyundai Heavy Industries (HHI) and Samsung Heavy Industries (SHI) at the cost of US$1.6billion. NLNG is procuring the ships, as part of efforts to expand its shipping

s u b s i d i a r y, B o n n y G a s Transport (BGT) fleet and thus position the exporter as a choice supplier of liquefied natural gas, considered the cleanest fossil fuel by energy industry experts. NLNG had included a package of local content elements in the contract agreement with HHI and SHI, for the benefit of Nigerians, local companies and the country’s broader maritime sector. Local companies like Berger Paints Plc, Nexans, Kabelmetal, Metec West Africa and Pa i n t s a n d C o a t i n g s Manufacturers Nigeria (PCMN) were said to have already reaped revenues amounting to over $10million from exports of their products to South Korea for use in building the six NLNG ships,

the first of which is due for delivery in 2016. Also included in the local content package is the drive by the company for investment in a ship repair and dry docking facility in the

country to boost the economy and increase trade. The almost five dozen trainees make up one aspect of the composite 580 trainees Nigeria LNG have enlisted to undergo training in various aspects of shipbuilding and construction in training centres in Bonny, Lagos and South Korea. “As you know, the training of Nigerians in the different crafts of ship building is one important part of our local content package in the procurement of our ships. And these 57, who are en route to South Korea, are about one-tenth of the many hands being trained to support the growth of our country’s maritime industry. I wish them every success on the course,” said Kudo Eresia-Eke, Nigeria LNG’s General Manager, External Relations. He also explained that NLNG’s Nigeria Content is aimed at attaining the maximum achievable Nigerian Content deliverable in all its activities. “Its goal is reaching the targets set in the Nigerian Oil and Gas Industry Content Development Act (NOGICD) 2010,” he said. BGT owns ten of the twenty-three vessels it deploys in delivering cargoes of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) to an expanding portfolio of buyers located primarily in Europe and the Americas. It also delivers spot cargoes to the Middle East and Asia.

Fate of Iran’s gas export to Pakistan uncertain

hile the deadline for Pakistan to build a pipeline for the import of gas from Iran is over and the Islamabad government should pay a heavy penalty for the delay in implementation of the project, due to the silence of official news sources the fate of the pipeline is not clear yet. At a time that Pakistani officials have stated a new agreement has been reached between the two countries for the export of gas, Iran’s Oil Ministry in a statement has denied the report. The Iranian Oil Ministry stressed that negotiations have been held between highranking officials of Iran and Pakistan for the

gas deal but no new agreement has been reached in this regard yet. “New agreements on Iran-Pakistan gas pipeline are not true,” shana.ir quoted Iran’s Oil Ministry as saying. Recently news sources have reported that Iran has proposed a revised agreement to Pakistan according to which Islamabad should consider a third party for its payments to Iran. According to a contract signed between Iran and Pakistan in 2008 Iran’s gas was planned to be exported to Pakistan by December 2014.

Gas

China builds largest coal mining gas facility to generate electricity

Coal mining gas facility

hinese coal mining firm, Lu'an Group, said it has built the world's largest facility to generate power from methane gas emitted during coal mining, as the country looks to reduce poisonous gas emissions that contribute largely to pollution. The official Xinhua news agency reported that Lu'an Group built the facility, which is capable of utilising 99 percent of methane gas discharged from the Gaohe Coal Mine in north China's Shanxi Province. The company would soon start operating the generator with a capacity of 30 megawatts. The new technology will turn methane concentrations lower than 10 percent, which qualifies 81 percent of the gas released during mining, into electricity. The poisonous gas with concentrations of more

than 10 percent is transformed into methyl alcohol and as fuel for internal combustion engines. Jia Jian, deputy head of the Methane Gas Research Institute of the company, said the new technology has helped tackle the problem of how to dispose of the waste, Xinhua reported. The newly built facility would decompose the gas into carbon dioxide and water under temperatures more than 950 Celsius, and use the heat and steam for power generation. Jian added the project can help reduce 1.4 million tonnes of greenhouse gases and produce 200 million kwh of electricity a year. Low-concentration methane gas has been a major contributor to China's environment pollution. Coal mines are estimated to produce more than 10 billion

cubic metres of the gas every y e a r, w h i c h l e a d s t o greenhouse gas emissions equivalent to 200 million tonnes of carbon dioxide. The facility installed at Gaohe Coal Mine has drawn interest from a number of coal mining firms, as the coal industry is facing significant

pressure from the central government to control carbon emissions, Xinhua noted. China is targeting the reduction of carbon emissions per unit of gross domestic product by 40-45 percent from the level in 2015.

Nembe community rejects Agip Christmas gift The people of Nembe in the Nembe local government area of Bayelsa State have rebuffed the presents of a goat and 10 bags of rice offered to them by the management of the Nigerian Agip Oil Company (NOAC). Agip had made the donation as a Christmas gift. But the community’s oil and gas committee headed by Mr. Nengi James spurned the offer on behalf of the elders and other members of Nembe. Several members of the community said they were angry that the oil firm would offer such paltry donations to the

people of Nembe whose traditional ruler, Edmund Dakoru, once served as Nigeria’s Minister of Power. In a statement issued on Sunday, the chairman of the Nembe oil and gas committee, Mr. Nengi James, described the gift as “a corporate embarrassment to the traditional institution and the good people of Nembe Kingdom.” James recalled a meeting with the oil firm’s General Manager when he visited King Edmund Dakoru alongside his management team where issues of corporate social responsibilities were addressed.

Finance

Thermal Power Plant, Ughelli, Delta State

Nigeria spends N736bn on fuel import in nine months BY MICHAEL EBOH

i g e r i a imported N736 billion worth of Premium Motor Spirit, also known as fuel, in nine month — between January and September 2014 — data from the National Bureau of Statistics, NBS, has revealed. This, according to the NBS, in its Foreign Trade Statistics for the first, second and third quarters, was in spite of the fact that the country exported crude oil valued at N9.433 trillion in the same period. Specifically, motor spirit import, as the NBS called it, was N192.5 billion in the first quarter of 2014, representing 12.5 per cent of total imports for the period, while N315.7 billion worth of motor spirit was imported in the second quarter, representing 16 per cent of total imports. In the third quarter of 2014, Nigeria imported N227.8 billion motor spirits, representing 12.5 per cent of the country’s total

imports. On the export side, the NBS reports revealed that crude oil export stood at N3.234 trillion in the first three months of 2014, representing 81.5 per cent of Nigeria’s total export, while N3.268 trillion worth of crude oil was exported in the second quarter of 2014, accounting for 69.8 per cent of Nigeria’s total export in the period. In the third quarter of 2014, Nigeria exported N2.931 trillion of crude oil, representing 65.4 per cent of the country’s total export in the period. Continuing further, the NBS reports disclosed that Nigeria exported N924.199 billion worth of natural gas and liquefied natural gas in the nine months period, between January and September 2014. Specifically, in the first quarter of 2014, Nigeria exported natural gas and liquefied natural gas valued at N329.997 billion; second quarter — N309.5 billion and third quarter — N284.702 billion. Giving an analysis of Nigeria’s foreign trade statistics for the

third quarter of 2014, the NBS declared that the total value of merchandise trade in third quarter 2014 stood at N6.299 trillion, dropping by 5.4 per cent or N359.6 billion from total merchandise trade of N6.66 trillion recorded in the second quarter. According to the NBS, the decline was a result of both a fall in the value of exports and imports in the third quarter relative to the second quarter; as exports declined by N202.7 billion or 4.3 per cent to N4.479.5 trillion, while imports declined by N157 billion or 7.9 per cent to N1.820 trillion. To this end, the NBS declared that the balance of trade remained favourable at N2.659 trillion in the third quarter of 2014. Continuing, the NBS said, “C l a s s i f i e d b y S t a n d a r d I n t e r n a t i o n a l Tr a d e Classification (SITC), the quarter-on-quarter decrease in the value of imports was primarily driven by a fall in the value of Mineral fuel imports of N100.1 billion or 27.2 per cent

According to the NBS, the decline was a result of both a fall in the value of exports and imports in the third quarter relative to the second quarter; as exports declined by N202.7 billion or 4.3 per cent to N4.479.5 trillion, while imports declined by N157 billion or 7.9 per cent to N1.820 trillion from the N368.6 billion recorded in the Second quarter of 2013 to N268.4 billion recorded in quarter three. “However, significant declines were also recorded in Machinery and transport Equipment, declining by N44.2 billion or 6.8 per cent to a value of N606.4 billion in quarter three and Chemicals and Related Products, which declined by N39.5 billion or 14.6 per cent to an export value of N231.8 billion in quarter three. Analysis at the product level

showed that Motor Spirit recorded the greatest value of imports, contributing N227.8 billion or 12.5 per cent of the total imports for third quarter 2014. “Third quarter imports classified by Broad Economic Category showed that Industrial Supplies accounted for the greatest value of imports, at N510.2billion or 28.0% of total imports, followed by Capital goods at N378.9billion or 20.8 per cent of the total, and Food and beverages at N323.8 billion or 17.8 per cent of the total.”

Power

Power: There is no going back to Egypt, FG declares …Promises rapid development of sector

Shiroro dam

CHRIS OCHAYI

otwithstan ding the hiccups t h a t characteriz ed its early take-off, the Federal Government said it has resolved not to give up the zeal and commitment to facilitate steady electricity supply to Nigerians in the post-privatisation era of the power sector. The government having seen through the power sector, an incredible inflow of foreign direct investments coming into Nigeria, further determined “There is no going back to Egypt on the quest to deliver power to the

consuming public.” Minister of Power, Professor Chinedu Nebo, savouring the success recorded from the power sector privatisation, told journalists during an interactive session in Abuja, that the country has crossed the Rubicon with regard to the privatization exercise. According to Nebo, “We have crossed the Rubicon with regard to delivery of power to our people, and there is no going back on that. It is very challenging because of so many other difficulties that I might touch on one or two of them.” He said, “Many people on the streets, in their homes, in the villages, even in the cities, have no idea the

implications of privatization. But there are things that need to be told over and over and over again for our people to begin to understand these things. “There are teething problems because the power sector had been neglected for decades; it has been ignored for decades. A situation w h e r e n o t o n l y infrastructural decay but a seeming systematic degradation of the work force; because for 16 years plus, before the coming of President Jonathan, not even a single engineer was hired by NEPA or PHCN. “No technologists, no professional technicians in various areas were hired.

How would you run a power sector in a situation like that,

“We have also seen through the power sector, an incredible inflow of foreign direct investments coming into Nigeria. In Africa of course, Nigeria is number one destination for foreign direct investments. We are now Africa’s largest economy and this is without the level of electricity we need. Think about it. The Minister said the transformation of the telecommunications sector will soon be felt in the power sector. “Fifteen years ago, there were 150,000 telephones lines in Nigeria. Government privatized and I could remember those days because I was already a university professor. I could remember those days. What happened? “To get a line, you had to pay for the line; you will pay the visible and the invisible payment, you understand what I am talking about. And very often the invisible one is more than the visible one, the

There are teething problems because the power sector had been neglected for decades; it has been ignored for decades. A situation where not only infrastructural decay but a seeming systematic

where the workers are aging and dying and retiring and nobody is being trained to replace them? It was very unfortunate.

un-receipted one is more than the receipted one. “Then any time that line goes bad, it takes you one day to lodge your complain, it

Power

Power: There is no going back to Egypt, FG declares CONTINUED FROM PAGE 16

takes another day for them to schedule maintenance and on the third day, they will tell you to bring your car and then they will remember that there is no ladder. You now go and rent a ladder and then maybe in four days time your phone is working. Nigeria privatized. “Today we have over 120million telephone lines. You don’t need any ladders, you don’t need any poles. They are just there for everybody. Electricity will eventually become that way too,” he said. He also said that Nigeria will overcome the challenges in the sector. According to h i m , “ We a r e o n t h a t

should be generating 160,000 Megawatts. So of course all the power companies in the world could not make this happen in a year or two. All the turbine manufacturers in the world couldn’t make that happen overnight. So you can imagine what the demand for electricity is. Nebo explained that d e v e l o p m e n t , m a n u f a c t u r i n g , industrialization follow the trail of electricity. “So the demand-supply for electricity in Nigeria is so huge and that is why it is a pledge that all of us should find whatever we can in the future as the door gets open, to invest in because it is

Today we have over 120million telephone lines. You don’t need any ladders, you don’t need any poles. They are just there for everybody. Electricity will eventually become that way too

trajectory of growth and we will get there. Because if you look at South Africa that is now second largest economy in Africa, we were second but we have now overtaken them, South Africa generates 40,000 Megawatts of electricity for 43million people. We generate 4,000 Megawatts for 170million people. “So if we wanted to be at par with South Africa, we

going to grow very rapidly. “That was one of the things I saw when I was appointed a s Vi c e C h a n c e l l o r o f University of Nigeria almost 11years ago. I got there and found out that virtually all of the departments that were in Sciences and Technology, E n g i n e e r i n g , Pharmaceutical Sciences, Physical and Biological Sciences, all the technologists were chief

technologists. “There were no deputy or assistant chief technologists, there were no principal technologists, there were no senior technologist and there were no technologists 1 and 2. And so what I found out was that for over a dozen years, not a single technologist had been appointed by Nigeria’s Premier University. “And the same thing could be said of most of the other universities. So you do not grow a system that way, it never happens. “So if we can neglect our human resources, you can then extrapolate to see the gigantic neglect of the physical, engineering infrastructure in the power sector. So that was why Mr President gave us leave and within the past year and half, over one thousand electrical engineers and a few mechanical engineers among, a few computer engineers have been hired by the Transmission Company of Nigeria and ancillary services of the power sector. So we are trying to redress that. The Minister blamed the hiring of foreign technicians on non availability of Nigerian in that cadre. “Look around our country today and if you want to build a house and you want to do POP like this, you look for Ghanaians, Liberians, Senegalese, Ivoriens, etc because if you get people from our place, they cannot do it well. If not for the banning of Okada, every young man now wanted to operate Okada. “And if we had a power sector that we don’t position our young people, with the requisite skills to run the power sector, very soon we will become hewers of wood and fetchers of water for foreigners who will come and take over the power sector.

IKEDC appeals to consumers over new payment platforms

he Ikeja Electricity Distribution Company Plc (IKEDC) has appealed for understanding by its consumers over difficulty in accessing new payment platforms for the payment of their monthly bills. Pekun Adeyanju, the assistant general manager of Public Affairs Division of Ikeja Electric said that the difficulty or delay would soon be remedied. According to him, the management was putting everything in place to rectify the problem and make it easier for consumers to pay. He said: "We have received series of complaints as a result of our new payment platform for prepaid and postpaid consumers. "It is certain that these problems should arise because it is new and the management is doing everything possible to make sure that these problems are resolved within this week. "I am hopeful that by the time our consumers are paying their next monthly bill, it won't be difficult again. They should please bear it with us." Recall that Ikeja Electric on last November said that consumers could now pay bills or buy tokens through vouchers, Point-of-Sale terminals and bank branches following an upgrade in the company's systems. It said the systems were to enhance secure, convenient and more efficient payment options. It also said that the new platforms were being powered in collaboration with First City Monument Bank, United Bank for Africa and Nigeria Inter-Bank Settlement System to ensure that post-paid customer accounts were credited promptly.

India raises solar investment target to $100 bln by 2022

ndian Prime Minister Narendra Modi has ramped up his target for solar energy as he bets on renewables to help meet rising power demand and overcome the frequent outages that plague Asia's third largest economy. India gets twice as much sunshine as many European countries that use solar power. But the clean energy source contributes less than one percent to India's energy mix, while its dependence on erratic coal supplies causes chronic power cuts that idle industry and hurt growth. Modi now wants companies from China, Japan, Germany and the United States to lead investments of $100 billion over seven years to boost India's solar energy capacity by 33 times to 100,000 megawatts (MW), said Upendra Tripathy, the top official in the Ministry of New and Renewable Energy. That would raise solar's share of India's total energy mix to more than 10 percent. In Germany, a leader in renewable energy, solar accounted for about 6 percent of total power generated in 2014. India had earlier set an investment target of $100 billion for the next five years for all types of renewable energy, with wind taking up two-thirds of the total. In an interview, Tripathy said Modi's new solar target was ambitious, "but if you do not have a higher goal, you will not achieve anything".

Technology

Jimlaw2004@gmail.com

irectional b o r i n g , commonly c a l l e d horizontal directional drilling or HDD, is a steerable trenchless method of installing underground pipes, conduits and cables in a shallow arc along a prescribed bore path by using a surface-launched drilling rig, with minimal impact on the surrounding area. Directional boring is used when trenching or excavating is not practical. It is suitable for a variety of soil conditions and jobs including road, landscape and river crossings. Installation lengths up to 2000 m have been completed, and diameters up to 1200 mm have been installed in shorter runs. Pipes can be made of materials such as PVC, polyethylene, polypropylene, Ductile iron, and steel if the pipes can be pulled through the drilled hole. Directional boring is not practical if there are voids in the rock or incomplete layers of rock. The best material is solid rock or sedimentary material. Soils with cobble stone are not recommended. There are different types of heads used in the pilot-hole process, and they depend on the geological material. Equipment The equipment used in a horizontal directional drilling depends on the outer diameter of the pipe, length of the run, ground conditions and the surroundings above ground. For the large bores, directional drills equipped with as much as 600 tonnes 1 320 000 lb (or more) of thrust/pullback (Vermeer D1320x900)is used in conjunction with a mud reclaimer, excavator, and multiple pumps and hoses to supply the drilling fluid to the drillstem. Directional drilling stem is made from heattreated high-carbon steel for strength and ships in diameters of 8 - 15 cm. Drill stem sections are manufactured in 3.0 or 4.6 and also 9.1 meter lengths and have male threading on one end, and female on the other. It is common for a directional drill to carry as much as 305 m of rod on board. Drilling heads come in multiple designs and depends on the rock or soil being penetrated. The

Horizontal Directional Drilling

drilling head has multiple water ports to allow removal of material. A talon bit involves the carbide-tipped cutters. These allow for steering and cutting the material. Another head is a mud-motor that is used in rocky landscapes. Furthermore, supporting equipment is needed to assist directional-drilling or HDD to work smoothly, such as drilling mud recycling system, shale shaker, mud cleaner, centrifugal pump, mud tanks, etc. Technique Directional boring is used for installing infrastructure such as telecommunications and power cable conduits, water lines, sewer lines, gas lines, oil lines, product p i p e l i n e s , a n d environmental remediation casings. It is used for crossing waterways, roadways, shore approaches, congested areas, environmentally sensitive areas, and areas where other methods are costlier or not possible. It is used instead of

other techniques to provide less traffic disruption, lower cost, deeper and/or longer installation, no access pit, shorter completion times, directional capabilities, and environmental safety.

The technique has extensive use in urban areas for developing subsurface utilities as it helps in avoiding extensive open cut trenches. The use requires that the operator have complete

information about existing utilities so that he can plan the alignment to avoid damaging those utilities. Since uncontrolled drilling CONTINUES ON PAGE 19

Technology

Horizontal Directional Drilling CONTINUED FROM PAGE 18

can lead to damage, different agencies/government authorities owning the urban right-of-way or the utilities have rules for safe work e x e c u t i o n . F o r standardization of the techniques, different trenchless technology promoting organizations have developed guidelines for this technique. Process The process starts with receiving hole and entrance pits. These pits will allow the drilling fluid to be collected and reclaimed to reduce costs and prevent waste. The first stage drills a pilot hole on the designed path, and the second stage (reaming) enlarges the hole by passing a larger cutting tool known as t h e b a c k r e a m e r. T h e reamer’s diameter depends on the size of the pipe to be pulled back through the bore hole. The driller increases the diameter according to the outer diameter or the conduit and to achieve optimal production. The third stage places the product or casing pipe in the enlarged hole by way of the drill stem; it is pulled behind the reamer to

allow centering of the pipe in the newly reamed path. Horizontal directional drilling is done with the help of a viscous fluid known as drilling fluid. It is a mixture of water and, usually, bentonite or polymer continuously pumped to the cutting head or drill bit to facilitate the removal of cuttings, stabilize the bore hole, cool the cutting head, and lubricate the passage of the product pipe. The drilling fluid is sent into a machine called a reclaimer which removes the drill cuttings and maintains the proper viscosity of the fluid. Drilling fluids hold the cuttings in suspension to prevent them from clogging the bore. A clogged bore creates back pressure on the cutting head, slowing production. Locating and guidance Location and guidance of the drilling is an important part of the drilling operation, as the drilling head is under the ground while drilling and, in most cases, not visible from the ground surface. Uncontrolled or unguided drilling can lead to substantial destruction, which can be eliminated by

properly locating and guiding the drill head. There are three types of locating equipment for locating the bore head: the walk-overlocating system, the wire-linelocating system and the gyro guided drilling, where a full inertial navigation system is located close to the drill head. — Wa l k - o v e r l o c a t i n g system — In first system a sonde, or transmitter, behind the bore head registers angle, rotation, direction, and temperature data. This information is encoded into an electro-magnetic signal and transmitted through the ground to the surface in a walk-over system. At the surface a receiver (usually a hand-held locator) is manually positioned over the sonde, the signal is decoded and steering directions are relayed to the bore machine operator. —Wire-line locating system — The wire-line system is a Magnetic Guidance System. With a Magnetic Guidance System (MGS), the tool reads Inclination and Azimuth. The MGS, also has a secondary means of location verification utilizing wire grids laid on the ground

surface. It is the only system that has the capability of verifying the location. This information is transmitted through the wire-line fitted within the drill string. At the surface, the Navigator in the drill cab performs the necessary calculations to confirm the parameters have been met. The MGS even without the use of the wire grid has been accurate to almost 2 km with an accuracy of 1.5 m. —Gyro -based locating system — The gyro based system is fully autonomously working and therefore one of the most accurate system where sufficient diameter (200 mm) is available and where long distances (up to 2 km) have to be performed with small deviation (less than 1 m position error). All three systems have their own merits, and a particular system is chosen depending upon the site requirements. Advantages of the HDD method: —surfaces worth conserving are neither

broken up nor damaged, road surface, front gardens etc.), restoration and repair are not required, which leads to high economical advantages —low social costs, because detours, setting up of signal systems, road blockings, are avoided —approved technology —short equipping times short drilling and construction times —very economic for river crossings —supported by the dynamic impact of the percussive hammer thrust and steer ability are improved in soil qualities up to class 5, sometimes even class 6 —simple technique — p u l l i n g f o r c e measurement and position determination possible —Broad application range Several Nigerian companies are now deploying the Horizontal Directional Drilling method in the energy, oil/gas and power sector. NB: If your company has a unique, modern technology, please, contact Nelson on 07056565800, or send an e-mail to ubong.sweetcrude@vangua rdngr.com

Labour

TUC worried over PIB as oil workers, FG dialogue Victor AHIUMA-YOUNG

MBRELLA body for senior staff associations i n t h e c o u n t r y, Tr a d e U n i o n Congress, TUC, has decried the uncertainty surrounding the passage of Petroleum Industry Bill, PIB, calling on the Federal Government to expedite action in passing the PIB into law failing which the Congress would be left with no other option than to embark on industrial action. This came as the Nigeria Union of Petroleum and N a t u r a l G a s Wo r k e r s , NUPENG, and its Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, counterpart would be working with the Federal Government through the Ministries of Petroleum Resources and Labour and Productivity, to find ways out of the PIB logjam. TUC at a meeting of its National Executive Council, NEC, in Lagos, said that further delays in the passage was inimical to the Nigeria economy. In a communiqué issued by TUC President, Mr. Bobboi K aigama and Secretar y General, Mr. Musa Lawal, members of TUC’s NEC said “the Congress is weary over the continued uncertainties on the passage of the PIB in the predictable future which is seemingly affecting the spate of divestment and downsizing of operations in the industry. On Nigeria Content Policy, TUC commended the initiative of the Federal Government on the local content policy aimed at effectively developing the entrepreneurial and manpower capacity and expertise of Nigerians. The body however noted that the process of integrating the human and material local content into the facets of the industries leaves much to be

Oil rig

desired, more so that since the policy was enacted in 2010, there had been no yard stick to measure the progress being made and the gaps to be corrected including the intervention that might be. It added that “the Congress further notes that the entrepreneurs that are being empowered are compromising employment

standards and flagrantly breaching workplace rights and decent work principles with intimidation and victimization. The NEC-insession calls on the relevant arms of Government and its agencies to effectively monitor and ensure compliance with extant national and labour laws to foster justice, fair play and

The workers had gone on a nationwide strike to protest the inability of the government to carry out turn around maintenance, TAM, of the refineries and reduce pump prices of petroleum products in line with the slump in global prices of crude oil

due process on employment and labour matters.” Oil workers, FG to address PIB Meanwhile, the oil workers under the aegis of NUPENG and PENGASSAN would be working with the Federal Government through the Ministries of Petroleum Resources and Labour and Productivity towards ensuring the passage of PIB. This was part of the agreement reached before the oil workers suspended a three-day recent nationwide industrial unrest. Recall that delay in the passage of PIB was one the grievances of workers which led to a national strike that shut the sector while the action lasted. At the meeting between leaders of the oil workers and Federal Gover nment, represented by officials of the Ministries of Petroleum Resources as well as Labour and Productivity, it was,

agreed that the Ministry of Labour, Ministry of Petroleum Resources, N U P E N G a n d PENGASSAN should meet on the issue to decide on the best productive line of action. The workers had gone on a nationwide strike to protest the inability of the government to carry out turn around maintenance, TAM, of the refineries and reduce pump prices of petroleum products in line with the slump in global prices of crude oil. They were also asking government to evolve new strategies to combat pipeline vandalism and crude oil theft that had impacted negatively on the nation’s economy and employment in the country.

Labour

VER a year ago, assets of the defunct P o w e r H o l d i n g Company of Nigeria, PHCN, were handed over to private sector owners. Mr Joe Ajaero, General Secretary of the National Union of Electricity Employees, NUEE, in this chat with Victor Ahiuma-Young spoke on among others, how the union has been tackling challenges in the sector. Excerpts. In the last one year, how will you assess the performance of the private sector power supply? Well, I am not the best person to comment on this because I am highly involved. I am highly partisan on this matter and every Nigerian knows my position. So, if you want to do a critical analysis on this, I should not be the person. Nevertheless, I predicted what is happening and what I said was clear, e v e n w h e n I m e t M r. President a year or so before privatization, I gave him my analysis that privatization in the power sector has never succeeded anywhere in the world. I challenged all his experts to mention one country where it has succeeded and that is my position, up to this moment that the state funds the power sector. If you are now talking of post industrialization where you now have a vibrant, viable robust power sector, you can now think of who manages it. You can now say Ajaero manage Ikeja, but you will be paying N20million every month and if Ajaero collects N25million he is making a profit of N5million. But the money to build power stations or transmission network, the state must bring it and when you are talking of a private sector, how much do they have? At what return of investment are they going to borrow money from bank because if they are lending now at 20 percent, they are going to transfer that 20 percent to the customers. If private sector borrows money at 20 percent interest rate that is what they will add for c o n s u m e r s t o p a y. Government is not there probably to make profit and we gave this analysis. We gave analysis even from the oil money, we can be setting aside 0.5 percent every month and for a period of 5years or 10 years, the power sector will survive. We gave a position

Joe Ajaero

How we are confronting challenges in power sectorâ&#x20AC;&#x201D;Labour At what return of investment are they going to borrow money from bank because if they are lending now at 20 percent, they are going to transfer that 20 percent to the customers. If private sector borrows money at 20 percent interest rate that is what they will add for consumers to pay

where you can reduce corruption by certain percentage and revive the power sector, but they said no and they were talking about South Africa. Power sector in South Africa today is hundred percent

government-owned. Now what that means is that already there is power poverty in Nigeria because the worldâ&#x20AC;&#x2122;s acclaimed standard is that wherever you have one million people, there must be one thousand megawatts. But we have 160

million Nigerians and we are battling with four thousand megawatts and they said the private sector would do it. Now private sector operators have borrowed money to buy, every month they must pay interest on the money they borrowed and they must make some profit. And we were told when they were privatizing that we must look at technical competence, managerial ability, foreign direct investment and so on. Now, which one dollar entered Nigeria as a result of privatization of the power sector? Mention any foreign company that came to buy the power sector. It is Nigerian banks that they borrowed money from to buy the power sector. That is where we are today. So, do I continue to lament on this as a Nigerian? I equally said that America, the home of capitalism, today

2 5 0 , 0 0 0 megawatts is generated by the A m e r i c a n government. But because of their policy of moving towards 1 million megawatts, they said to municipal, state and private to now generate. Their argument is that they have excess of about 750 thousand megawatts that these groups can generate. The whole essence of that is that there is a lot to be done. They have the s c h o o l s , hospitals, the social centres that must be supplied. America will make sure that all t h o s e establishments get supply. Here if by 2015, they announce that tariff must be at 200 naira per k i l o w a t t h o u r, there is nothing anybody can do about it, no fall back position. That was our argument then that if Nigerian gover nment is generating four t h o u s a n d megawatts in a country that requires over 5 0 , 0 0 0 megawatts, canâ&#x20AC;&#x2122;t

the private sector generate 30 or 40 thousand megawatts and leave this four thousand megawatts for the state? What they did was to transfer the same four thousand megawatts from PHCN to the private sector. The PHCN they said was inefficient, obsolete, dead, that was what all the private sector came to share. Every one of them was telling the world that PHCN was inefficient and obsolete. Now they divided it to about 23 companies and shared the inefficiency of PHCN and nobody is talking now about what is happening with outrageous bills without power supply. It is over a year that new owners took over the sector, what has happened to the 10 percent shares that is said to be available to workers? CONTINUES ON PAGE 22

Labour CONTINUED FROM PAGE 21

Well, you know that the 10 percent shares has been a rule since all these years and unions where privatization had taken place had not bothered to challenge or ask for it. They would say 10 percent share is allocated to the workers and they would sack all the workers before the 10 percent is been made available. So, we saw this as a challenge. In fact, we challenged the Bureau for Public Enterprises, BPE, in the first instance on the issue of 10 percent. They were saying that it is 10 percent of the remaining government shares and we said no, it is 10 percent of the hundred, of the whole. That was the problem we had with them initially because we were ready to go for the 10 percent. So, it got to a level that we got our lawyer to write BPE for our 10 percent and he did and they wrote back to him to say that the 10 percent of the shares was still available when government divests. But as at now, they are still in the process of finishing the privatization or the so-called reform as they call it. Of course, you know the handing over of Kaduna, Afam and others are yet to be done. When that happens and when government divests its investment, then the 10 percent would be there. So, we are watching them closely and to make sure that nobody tampers with it. Of course, we have placed them at alert to make sure that nobody tampers with that 10 percent. What we are looking at now is to fully participate in the sector, maybe if we manage an area, we will provide an example, a module or even set standard, to justify all those criticism we had done. We want to provide a module of how the power sector should be managed or how a company should be run. That is what we are looking at. How many of these new companies have you unionized? Well, like you know, many operators in the private sector don’t like unions and they showed it when they came on board. It has been a very active sector but we didn’t take it easy anyway. Because we knew that these people would oppose unions, so we prepared our minds that we were going into a long distance race that might take four, five years and even more. We were prepared to the level that even if we don’t have one member, we would

How we are confronting challenges in power sector—Labour be able to sustain the union until we finish this race. But by the time we finish, they would count their losses and we would also count ours as well. So, it was based on that premise that we started and we can announce to you that it is only one of the 18 or 19 companies, because so many others came out from Power Holding Company of Nigeria, PHCN, that is proving stubborn. There are about 23 or so but it is only one, that is Port Harcourt electricity that said no, that unionization will start afresh and they printed form, they became organizing secretaries to our union, they printed and shared forms, some filled and some didn’t and we told the management that when they finished, they should proceed to deduct dues, collect dues and spend. So, any moment from now, we will engage them. Other areas we fought and we had agreements with them. At the beginning, two companies; Port Harcourt and Yola went to court. Yola later asked for out of court settlement and we resolved and moved ahead. So, it is Port Harcourt that we have battle with, and we will fight it to the last because even when we did picketing not long ago, they hired thugs. In fact, the thugs destroyed Nigeria Union of Petroleum and N a t u r a l G a s Wo r k e r s , NUPENG, vehicle that was on solidarity. They even stole phones among others. So, we are still on it and by the time we finish this process we will enter another process no matter how long it lasts, we will know who blinks first. At the last check, the new owners gave workers six months contract that was renewed later, what is the situation now? There are serious challenges and if we fail to acknowledge that there are challenges with these new people, we are telling lies. In fact, some union functionaries were targeted and disengaged. Some who are either state chairmen, chapter chairmen and so on were targeted for

Joe Ajaero

we are going to follow them and come up with new conditions of service. We are going to come up with procedural agreements, new conditions of service that will stipulate all those areas. Everything will be captured whether we will tolerate contract or casual employment or not victimization, and this issue of the first six months was contentious. Ordinarily, in the first six months, nobody was supposed to leave employment as clearly stated by the National Council on Privatisation, NCP, Act. It said there should be no involuntary severance because it was a period the new investors were supposed to work with these workers and access their competence.

But that was not the case. We are challenging them at appropriate places now. But these people out of their excessive greed disengaged many workers and gave them six months contract, a six months transition period which ordinarily nobody should have been disengaged. In some areas, they have given them letters while in some areas, they are silent. But one thing that has

happened is that PHCN condition of service has expired with this process and apart from one or two areas, we have started negotiations. In fact, we are negotiating differently with them. Some are responding, some have asked for time and some are talking. But one or two have said that it is their duty to bring conditions of service and we have given it back to them. So, in all these places, according to their own systems, we are going to follow them and come up with new conditions of service. We are going to come up with procedural agreements, new conditions of service that will stipulate all those areas. Everything will be captured whether we will tolerate contract or casual employment or not. But, until that is done it is like nothing is happening with the expiration of the existing condition of service.

Insurance

From left: Mr. Ephraim Faloughi, Chairman, Sovereign Trust Insurance Plc; Kazeem Raji, FCMB Capital Market Limited; Mr. Oluseun Ajayi, Vice Chairman, Sovereign Trust Insurance and Mr. Wale Onaolapo, MD/CEO, Sovereign Trust at the signing ceremony of the proposed rights issue of the underwriting firm billed to commence in January, 2015.

2014: Insurance of oil and gas risks minimal Rosemary ONUOHA

nsurance of oil and gas risks in the country in year 2014 was minimal, compared to the previous year, as insurers were cautious in insuring risks in the oil sector due to huge claims which they had to pay in the previous year. Although experts are of the opinion that available investment opportunities for insurance industry operators include the local content initiative of the federal government in oil and gas sector, operators have not availed themselves to take such opportunities. According to these experts, government’s target of 70 per cent local content provides significant opportunities for insurance companies whose capacity had hitherto been a

hindrance to meeting earlier targets. Accordingly, insurance penetration however remained low in the year in review, and rate competition in the midst of the myriad challenges in the macro economy further shrunk margins for operators in the industry and considerably constrained income generation. In all, despite the efforts of the regulatory authorities and operators, the insurance industry continued to lag behind other sectors in its contribution to the Gross Domestic Product, GDP, remaining below one per cent. Commenting on these developments, Chairman of Prestige Assurance Plc, Mr. Charles Sankey, said that power sector reforms were expected to improve power

According to these experts, government’s target of 70 per cent local content provides significant opportunities for insurance companies whose capacity had hitherto been a hindrance to meeting earlier targets

generation, and for the economy to continue on its current growth trajectory and for the business climate to improve for the insurance i n d u s t r y, h o w e v e r, t h e reverse was the case. Chairman of Standard Alliance Insurance Plc, Mr. Aliyu Sa’ad, said that there were expectations that the Petroleum Industry Bill will

be passed, which will help improve local content, ensure technology transfer and job creation. However, the passage of the bill did not materialise as expected. Other challenges in the sector Chairman of Capital Express Assurance Limited, Mr. Babatunde Adenuga, is of the opinion that the

23 Nigerian insurance industry has been characterised by certain weaknesses over the years which when addressed, will position the sector to realise most of its potentials as well as attract sufficient businesses both locally and internationally. In 2014, the enforcement of the ‘no premium, no cover’ initiative continued which aims to address the huge volumes of outstanding premiums owed many insurance companies and considerably improve their fortunes. Though there has been a significant reduction in trade receivables on the books of insurance companies, the envisaged growth in premium income is yet to materialise as insurance clientele adopted such strategies as quarterly policies in response to the new initiatives. Prospects in the sector Although the insurance sector has not fared well from insuring oil and gas risks, operators are optimistic that other lines of businesses hold huge prospects for the sector going forward. According to Sankey, “We have no doubt; however, that the ‘no premium, no cover’ policy will significantly boost the fortunes of insurance firms in due course and also help instil professionalism in insurance operations. For Sa’ad, the several reforms initiated and pursued by government and her agencies are expected to impact the economy positively going forward. Adenuga said that the industr y has begun to witness a lot of emerging opportunities on the back of current government legislation which has supported the prospects of growth in the industry. He said that risks to Nigeria’s economic growth are the sluggish recovery of the global economy, security challenges in the NorthEastern part of the country, and possible distraction from the ongoing reforms as a result of the upcoming 2015 general elections. “The decline in oil price and production is expected to have an adverse effect on the nation’s revenue, risk of fiscal deficit, slowdown in the accretion of external reserves as well as further weaknesses of the exchange rate,” Adenuga said.

Solid Mineral

he Country Director, Global Rights, Mrs. A b i o d u n B a i y e w u , laments over the sheer neglect of host communities in the solid minerals sector, and calls for an amendment of the Mining Act and stakeholders’ confab in this interview with Gabriel Ewepu. Excerpts: G o i n g b y t h e recommendations made by your organisation on the plight of host communities in the solid minerals sector, are you optimistic that mining companies and government will act accordingly to raise the standard of living of these communities? The first step is making everyone aware of what is going on. The next step is bringing every party to dialogue to find a solution. I also think something positive will come out it. First of all, I think the Minister of Mines and Steel Development, Arc. Musa Sada, is a progressive man and has created this level of awareness of what the issues are and is willing to make the amendments of the Mining Act and that will improve the lot of host communities. Can the mining sector be a major source of wealth creation for Nigeria and Nigerians? We can create massive wealth in Nigeria if we manage it effectively. The way it is right now, it enriches a few and impoverished a lot of people. What do you see about the future of Nigeria’s mining sector as the government, companies and host communities are concerned? I think we need to wake up to the fact that the way our mining industry is right now does not encourage sustainable development. We need to hold a stakeholders’ confab on mining itself and have a workable roadmap on mining in Nigeria in a way that protects host communities and also develops our economy. As an organisation, what is your support given to these impoverished and marginalised host communities in the solid minerals sector? The global rule of Global Rights is, ‘Do for others what they can do for themselves’. Basically, what we do is build

Abiodun Baiyewu

Nigeria needs mining stakeholders’ confab for workable roadmap —Baiyewu their capacities, provide them knowledge, and mentor them through a process for them to stand on their own rights. We had training workshops in Zamfara, Ebonyi, Niger, Ogun, Osun, and Kogi States. We create awareness of rights for host communities, providing platforms for dialogue to discuss what the issues are with other stakeholders. Like government and mining companies, including other parastatals and stakeholders discuss on the issues affecting host communities. On the issue of the Mining Act and plight of host communities, what do

you think can make the Act a biting and protecting document? The Ministry itself need an overhaul in its vision and priority. The priority of the Ministry is to be the protection of citizens, ensuring that mineral resources are mined in a sustainable manner and development through mineral extraction should be a priority and not just the attraction of foreign investors who simply take our wealth to their countries with very little putting back to our coffers or to our host communities. A re y o u c a l l i n g f o r a n

24 amendment of the Mining Act? I am definitely calling for an amendment of the Mining Act and we will be engaging with the government on a higher level on that issue. As an international organisation that advocates for the rights of marginalised or oppressed host communities and individuals, what has been your challenge? Not many organisations work in the solid minerals sector, but many in the hydrocarbon extractive industry which is basically in the Niger Delta. Most of the host communities don’t know about human rights and not to talk about what their rights are. And having bridged the gap of international best practices and what we have here in our local laws in Nigeria, and that has been a challenge. What is your advice to the government on moving the solid mineral sector forward? Government needs to be proactive, develop sincere policies to ensure the protection of vulnerable people. We need various government ministries to work together. Ministry of Mines and Steel Development needs to properly work with Ministry of Environment. Ministry of Health must stop pretending on these issues and must be proactive. Ministry of Water Resources seems to have no clue in mining and it is really not doing much in regulating the use of water by the extractive industries. They must all learn to work together effectively, there must be that seamless coordination and not competition among them. Talking about companies that carry out these mining activities what do you want them to do in improving the lot of host communities? They should have good business relations with host communities, and they should not infringe on the rights of the host communities. They are to abide by ensuring the security of human rights, to ensure they have local content in their supply chain as well.

Maritime

CBN office, Abuja

Naira depreciation will affect the maritime industry Godfrey BIVBERE & Agnes OBIOBO

anaging Director / Chief Executi v e Officer of Accepters Nigeria Ltd., Alex Peters, has said that the free fall of the nation’s currency will slow down the growth of the maritime industry. Peters explained that the naira depreciation will increase the cost of items required for the industry. He noted that the cost of acquiring a $20 million ship before the depreciation would no longer be enough afterwards.

The marine engineer explained out that a ship buyer would have to pay the difference between the original cost of the naira and the current cost. He also said that the same thing applies to other areas of the industry like, importation, shipping of goods, insurance, owing to the fact that transaction in the industry is dollar denominated. According to him, “It will slow down the growth of the maritime industry in many ways. If we say we want to increase the Nigerian tonnage for instance and you have just arranged 20 million dollars to buy a ship, just at

the point you are to do that, the depreciation sets in. The $20 million you set aside in naira terms will no longer be enough. You have to cough out more money to buy the ship and therefore you may not be able to do that immediately, which is a drawback. The maritime industry is very capital intensive. Almost all aspect of the industry is dependent of foreign exchange.” He stressed the need for government to do all it can to stabilise the naira. “It is unfortunate that our economy was all oil dependent, so something happens to the oil price and

all of us begin to shake. “We must begin to diversify our economy more rapidly. The federal government has been fighting to diversify the economy. If there were to be industrialization where we are doing most of the manufacturing, then all these things would not happen. “We were exporting the crude and that account for about 95 percent of our budget, but if we have succeeded in diversifying, then the economy would be dependent on manufacturing and other raw materials like solid minerals and agriculture. I know also that there have been a lot of efforts but these things take time,”

he added. Peters also noted that the government had been called upon to pay more attention to the maritime industry because of the potential in terms of revenue generation for government on the one hand and e m p l o y m e n t opportunities that could be created by the sector. He pointed out that government has no choice now but to develop the sector especially with down turn in the oil and gas sector.

Maritime

Apapa-Oshodi traffic: Evacuation by barges only solution

Oshodi-Apapa gridlock

Godfrey BIVBERE & Olaitan AYOOLA

e a d Consultant of C.A. B o r h a Managem ent and Economic Services, Chris Abiodun Borha, has said that the only short term solution to the chaotic traffic situation along the ApapaOshodi Expressway is to deplore barges to lift products from the tank farms along the route. Borha, who spoke with SWEETCRUDE in his office in Lagos, explained that government should order

owners of the products and tank farms to commence evacuation of 30 percent of their stock through the waterways by the end of the first quarter of 2015. He said that government should further give a directive to these operators to prepare to increase the quantity to 60 percent by the end of the second quarter. According to Borha, “The short term solution is that the traffic for the evacuation of products must be diversified from land to water. It can be specifically directed that by the end of June or the first quarter of the New Year, 30 or 40 percent of the petroleum products from Apapa must be

loaded on barges. “You do not need deep dredging for that and it is going to generate coastal trade. But for the roads, it has been there before and nobody is re-inventing the wheel. Everybody should have a functional trailer park where you can call in those you need when you need them. “It is when you need them that they leave their park and go to the port. Thirdly, there was a World Bank study that was pin-pointing this offdock terminal close to Ijora (Lilypond) as the best location for that trailer park, the one being operated by Maersk Line and Maersk has

said that they want to give up Lilypond. “What needs to be done is to take a critical look at Lilypond, for it to be converted to this modern day trailer park, so that these oil tankers can leave the road. If we can evacuate 70 percent of them off the road, then tarring of the roads, traffic management will become feasible, but if you have not actually taken the big reasons out, you cannot eliminate them completely or be able to contain them.” He noted that the long term solution is to fix the pipeline between Lagos and Mosimi where the storage facility for petroleum products used to

be. The former chieftain of the Nigerian Ports Authority, NPA, explained that if the above is done, by the end of the New Ye a r, t h e problem of t r a f f i c congestion in and around the port town of Apapa will be a thing of the past.

Maritime

hortly after the ports were concessioned, t h e management of the Nigerian Ports Authority (NPA) went into partnership with a private firm in the area of marine operations with a view to keeping the port channels at a constant depth for easy entry and exit of vessels. In this interview with Godwin Oritse, the Managing Director of the Lagos Channel Management Company Limited, (LCM), Mr. Danny Fuchs, said that the venture has brought increased cargo and consequently more revenue to government. Excerpts : The towage contract between the land fall Towage management and the Nigerian Ports Authority is understandably, for 15 years. Is there any capital investment by Landfall, other than to operate and manage a fleet of vessels owned by the NPA? Let me again thank you for your interest in the Landfall. But then let me first correct your poor understanding of the terrain. We do not have a contract for towage. We have a contract to manage the fleet of tugboats. We are not managing any towage in the port. We are only called to take over and manage a fleet; consisting of six tugboats and one pilot cutter that belongs to the NPA. The contract is therefore to manage six tugboats, three pilot cutters, four more vessels. And our major capital investment is our knowledge, our expertise. In other words, the capital is the human beings, the machines and the human resources to make the goals work. So, we have since, been investing in the human resources so as to raise both the standard of the equipment and those who would operate them, to an acceptable, international standard. For your information, you may not always be able to find the people with the right competence, the right knowledge; but we took up the challenge. We have employed a multitude of local people; we have trained them; and we are still training them. We have sent them to training schools in Ghana, and elsewhere, to raise their knowledge, their competence. You donâ&#x20AC;&#x2122;t call it capital

Capital investment is mainly and basically in the human resources not in assetsâ&#x20AC;&#x201D;Danny Fuchs

Danny Fuchs

Our major capital investment is our knowledge, our expertise. In other words, the capital is the human beings, the machines and the human resources to make the goals work

investment; you call it capacity development. Over 90 percent of these people from the inception also know the programme: that we need to train them, educate and retrain them and to raise their level of certification. These have gulped a lot of money. S e c o n d l y, a s i d e f r o m developing their competence, we have also

provided four additional pilot cutters in batches of two. Although it is not our responsibility, but because we are partners to the NPA, and we noted from time to time, that there was stress and pressure, as a result of increasing demand in the port. And because, what they gave us to manage, we are not able to fully meet the increasing demands. This was why we bought, from our own money, four additional pilot cutters; so that we can supply and meet the demand. But, we must understand that we donâ&#x20AC;&#x2122;t have a service contract; we only have a management contract; and this is to manage the fleet of N PA . S o , t h e c a p i t a l investment is mainly and basically in the human resources not in assets, because this was not what was requested by the contract. If you build a house and you hand it to a property manager, do you ask him to build you another house? And if he manages your premises perfectly well, are you not going to pay him? So, are you training these Nigerians as part of the letters of the contract? It is not part of the letters of the contract. We are however training Nigerians because, it is part of our belief that except we also train them, they may not perform on their jobs, to the required international standard. So, for instance, if you give me your taxi to manage for you, would you expect me to simply engage a roadside driver, because he has a license to drive only? No. you must expect me to engage him, send him to school to learn how to drive a taxi to international standards; to understand how to talk to passengers he carries, to learn what exactly to do, if somebody is injured in his taxi. CONTINUES ON PAGE 28

Maritime

CONTINUED FROM PAGE 18

But in real sense, our contract did not specify that we are to train Nigerians. Our contract is to manage the fleet of the NPA tugboats up to international standards so that they can operate. But we on our own believe we must send those engaged to the mandatory courses, including teaching them how to swim; to know how to do life-saving; not necessarily because we like him; but because he must be competent, in order to do the job, perfectly in line with global standards. And this investment to us is the real capital investment even though many would see it as capacity development. But, in addition to this, we also must procure spare p a r t s . Ta ke O h a f i a f o r instance, if you add up all the money we have invested on it, it would procure another tugboat—from the cost of our a n n u a l s u r v e y, t h e intermediate survey we do, with Lloyds; then the special survey one does with the Lloyds; if you add up this money, you can actually buy a new tugboat. But it is our responsibility If you take a look at your three years of operation; we are specifically talking of year 2007, 2008 and 2009, you would find a consistent upward budgetary provisions of $13m, $14m and $15m respectively. Why is this so? Firstly, these figures were part of the agreement at inception, as presented by the NPA, to the Management Company. And they were agreed, on the basis of some parameters, at the planning stage. The first provision of the 2007 was when everybody assumed it was going to be the annual budget. It was agreed to, before the company started to work. The other figures which you also mentioned were also based on certain escalation parameters as provided for in the contract based on the NPA which is the lessor, and also the client; and the Landfall, as the management company. But why was there escalation? F i r s t l y, b e c a u s e t h e tugboats were getting older and the cost of their maintenance would be impacted. The NPA also understood that there was going to be major repairs within the period.

Capital investment is mainly and basically in the human resources not in assets—Danny Fuchs

Danny Fuchs But beyond this explanation, you must also realize that the basis for the calculation was largely based on the number of ships already coming into the country. This is because, as at that point, nobody knew how successful the contract would be. So, all the statistics available then was on the availability of 2072 ships that were then coming in. What that meant also was that since the calculation was based on a 12 month calendar, and the company did not start in January, but April, it also means that the company would not have collected all the budgetary provision. We collect money on budgetary basis; and the budget was calculated on

the number of ships that we handled within the period of the year. You must also understand that while the NPA was going into the agreement, they were not concerned so much as the number of operations that would be undertaken, as much as the need to play safe. So, the agreement ended up, actually favouring the Authority than the management company. As a result, they did not include the cost of shifting of ships, stringing or turning, salvage or even towage of a ship in distress. A lot of t h i n g s w e r e exc l u d e d , because they wanted to play safe and simply said, on the number of ships that came calling. There is an allegation that

We collect money on budgetary basis; and the budget was calculated on the number of ships that we handled within the period of the year.

your company sometimes connive with the NPA management to hike the value of contract executed so that both of you can then share the surplus amongst yourselves. What do you say to this? Well…we cannot change the mindset of some people. This is an allegation, which no one can substantiate. That statement is simply a mere allegation. But let me assure you that before we are paid anything, we always first furnish the number of the ships we handled, their names, the date they came in or leave and other relevant data; including the names of the pilot; the names of the tugs that attended to them; what terminals they visited; what ships left, before they berthed. So, let me assure you that in this arrangement, we talk of data, not of rumour. Are you now saying you only char ge, based on services you have rendered? No. if we charge on the basis of services rendered, we would be collecting more money than we are presently paid. We only charge on the basis of the number of ships that we handled. Luckily, for the NPA, even when the number of ships that are coming may be constant,

their sizes have changed. Larger vessels are now coming and that means, that we are now putting in more services, more efforts and more tugs than before, even though the charges have remained same. You must understand that ships dues are divided. Ships dues are paid by the ship owners or their agents to the Port Authority account. The parameter for this is their gross tonnage; and it determines how much money a ship is going to pay. There is the other dues called Harbour dues, which also go to the NPA. But there is another one called Cargo dues, which is collected by the terminal operators, agents and it is from this that they pay their rent, lease royalty etc. to their landlord But of the ship dues, the NPA is also expected to pay for towage, light house, etc. the ship dues can be seen as the revenue; while the cost of maintaining common user facilities, the access roads, towage, light house etc. may be considered as the expenses. But, while I am not the accounting officer of the NPA, I must let you know that the individuals there are men of integrity. So, I don’t think they will invest in towage, it is not meant to further boost their operation, efficiency and revenues. So, towage is also part of the service that the port must render to the trading ships that are coming in. So, you must look holistically at the operation of shipping. Is the shipowner going to see the salary of the ship captain as loses or expenses and therefore refuse to pay him? So, I do not see any investment in towage by the NPA as losing money, because, I am looking at the entire operation from a holistic point of view. It is a service the authority must give in order to enhance its revenue. It is like the fuel a taxi driver buys in order to keep running and picking passengers. The diesel is a loss, but if you invest in it, how can you operate your bus? So, also the food you buy is a loss; but if you do not invest in it, you also do not live.

Feedback

The social dimension of sustainability

Marina, Lagos Dr Uwem E. ITE

he concept of sustainability has been widely u s e d b y b u s i n e s s organisations, government agencies, non-governmental organisations and civil societies.Its origins can be traced to the environmental movement which emerged in the late nineteenth and early twentieth century. At that time, the term was widely used to draw global attention to the environmental damage arising from certain kinds of human activities which contributed to economic growth and development. In the process, most aspects of economic growth were therefore regarded as

To enhance the translation of the theoretical concept into practical use, social sustainability has been seen as the social preconditions for sustainable development or the need to sustain specific structures and customs in communities and societies ‘unsustainable’ principally because the natural environment was being degraded on a large scale to achieve economic growth and development. However, when the World C o m m i s s i o n o n Environment and Development (WCED) published its report, Our Common Future, in 1987, it

provided a political platform for international debate and t h i n k i n g o n t h e ‘sustainability’ of ‘development’. The report, often referred to as ‘the Brundtland report’ defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet

their own needs”. Although this definition has become highly influential, the emphasis of the Brundtland Commission was not on ‘sustainability ’, but ‘sustainable development’. Yet there is no universal agreement on the precise definition of sustainability. It is now clear that a desire for sustainability inherently implies a concern for both the present and the future. Therefore, in its true form, sustainability requires striking a good balance between the economic, environmental and social aspects of development. In other words, sustainability is a three-dimensional concept. This marks a significant departure and very clear shift from the original two-way

perspective which focused solely on the seemingly ‘symbiotic’ relationship between the economy and the environment. As such, it is now very common to find the three aspects of sustainability (economic, environmental and social) being representedas concentric or overlapping circles. To enhance the translation of the theoretical concept into practical use, social sustainability has been seen as the social preconditions for sustainable development or the need to sustain specific structures and customs in communities and societies. Based on this perspective, the traditional way of operationalizing social CONTINUES ON PAGE 30

Feedback

CONTINUED FROM PAGE 29

sustainability included the issues associated with basic needs including housing, education and skills, equity, employment, human rights, p o v e r t y, s o c i a l j u s t i c e . However, the emerging themes and domains of social sustainability now include issues related to demographic change; empowerment, participation and access; identity, sense of place and culture; health and safety; social mixing and cohesion; social capital; well being, happiness and quality of life. It is important to note here that among the ‘three dimensions’ of sustainability (i.e. environmental, economic and social), social sustainability has been the least theoretically developed, the least studied and the most overlooked. However, the relative lack of early and full understanding of the social dimension of sustainability provided an opportunity for several social and political theorists to contribute to defining and refining the concept, and creating confusion in the process as well. For example, it is now common to find the term social capital being used interchangeably with social sustainability. Furthermore, it is also common to see ‘levels’ or ‘types’ or ‘stocks’ of social capital being used as an ‘indicator ’ of social sustainability.From a purely research perspective, several approaches to social sustainability have now emerged. These include: Equity and human rights (e.g. poverty studies and unequal development), Capital stock (e.g. social capital, environmental capacity), Institutional theory and governance (e.g. participation and stakeholder analysis), Business and corporate studies (e.g. triple bottom line, corporate social responsibility), Behavioural sciences (e.g. well being, health and happiness perspective) There is no doubt that the themes and approaches highlighted above have provided the conceptual framework and foundation which many organisations have used to develop and implement their corporate social responsibility (CSR) projects and programs. Clearly, the current ideas and thoughts of CSR are derived

Housing estate

The social dimension of sustainability from the principles of social sustainability, as evident in the themes and approaches outlined above. For example, poverty reduction is one of the major objectives of national governments, international organizations, non-governmental organizations and local communities. However, until recently, there had been limited business involvement in the debate due to the lack of clarity regarding the role of business, and the absence of detailed and explicit exploration of the links between poverty and business at the level of the individual firm, or of the role that individual businesses can play in poverty reduction.

The good news is that the business community have increasingly used the concept of CSR to establish a framework for broader private sector involvement in poverty alleviation. The tenets and ramifications of CSR have been widely articulated by global business leaders, groups and organizations, and there is strong advocacy that business organizations should take the lead in poverty alleviation, especially in developing countries. Similarly, it is now gradually accepted that multinational corporations can have positive impacts in developing countries, through their CSR initiatives which focus on many social sustainability issues, including the promotion of

labour, human rights and cooperation with civil society. However, although there is powerful potential for C S R t o m a ke p o s i t i v e contributions to addressing the needs of disadvantaged communities, there are ways in which CSR could, whether b y m i s t a ke o r d e s i g n , damage the same communities politically, socially and economically. Therefore, there is need to explore the full ramifications social sustainability in the process of developing CSR strategies. To conclude, it is clear from the preceding sections that a desire for sustainability inherently implies a concern for both the present and the future. In order to fully capture social sustainability issues in CSR strategies, it is

imperative that organizations use a r a n g e o f approaches and methodologies for data collection and proper analysis prior to developing t h e i r C S R strategies. The approaches and methodologies include social i m p a c t assessments (SIA), stakeholder identification and engagements as well as strategic environmental assessment (SEA) incorporating social issues.

Chevron-Nigeria-Office

KEFFES communities, Chevron strengthen ties after years of bickering ...want siting of proposed gas collection plant in Keffes region

Samuel OYADONGHA

fter two years of bickering over alleged neglect of t h e i r communities in the aftermath of the Apoi North offshore platform gas explosion of 2012 owned by Chevron Nigeria Limited, indigenes of KEFFES communities spanning Southern Ijaw and Brass local government council areas of Bayelsa State last week converged in Yenagoa the state capital to formally commission the KEFFES Rural Development Foundation (KRDF) secretariat. KEFFES is acronym for Koluama I & II, Foropa, Fishtown, Ezetu I & II and

Sangana communities which are hosts to the American oil giant, Chevron in the predominantly riverine state. Other projects inaugurated in the communities under Global Memorandum of Understanding entered into with the oil giant include, the sand filling/dredging of Koluama I & II, parts of which had been lost to the rising sea, construction of concrete w a l k w a y s i n Fi s h t o w n , Foropa, Sangana, Ezetu landing jetty, renovation of classroom blocks and principal quarters among others. Sweet Crude learnt the sum of N141m was expended on the GMoU projects aside the ex -gratia spent on the communities by the oil giant. The commissioning

attracted, representatives of the state government, royal fathers from the KEFFES communities and Chevron, the sponsor of the projects. Speaking at the event, the paramount ruler of Koluama I, HRH, King Jeremiah L e g h e m o , t h a n ke d t h e company for the gesture. The royal father who spoke on behalf of the KEFFES communities, like “Oliver Twist” also called on the company to site its proposed multi-billion naira Feeder Gas Collection Plant in the area so as to give their people a sense of belonging. The feeder gas collection plant is expected to service the Brass Nigeria Liquefied Natural Gas (NLNG) project which construction work is expected to take off this year.

The siting of the proposed gas collection plant in the area, according to the royal father, would further cement the existing relationship between the communities and the company. The project, he added, would also create employment opportunities for the teeming youths of the area. The area, according to the monarch, has suffered grave economic losses, loss of lives and livelihood and other harsh environmental conditions due to the series of gas blow outs experienced over the years. “I will like to make a passionate appeal to Chevron and its operating partners to consider the gas collection plant to be sited at the KEFFES region.

The siting of the gas collection plant will give the people of KEFFES a sense of belonging in this partnership and will also create employment opportunities for the youths and the people of KEFFES,” he said. The royal father also called on both the state and local governments to increase their participation in the development of the area. Also speaking, the chairman of KEFFES Rural Development Foundation (KRDF), Mr. Christopher Tuduo, thanked Chevron for its numerous support and for the ex-gratia projects which according to him, have rekindled hope in the troubled Koluama I & II which were on the verge of being lost to the sea.

Community Samuel OYADONGHA

h e P o r t H a r c o u r t Electricity Distribution Company, PHEDC has blamed the irregular power situation in Yenagoa and its environs on the huge debt owed her by electricity consumers in the Bayelsa State capital and the unwholesome activities of some persons vandalising its facilities in the state. The outfit, which is still struggling to find its bearing, is being owed over N5.1bn in unpaid electricity bills by consumers in Yenagoa and its environs. Aside the communities in Ye n a g o a c o u n c i l a r e a , Kolokuma-Opokuma, parts of Ogbia council area and few communities in Southern Ijaw council area, a greater part of the state is yet to be connected to the national grid. But residents of Yenagoa have dismissed the alleged N5.1bn debt, wondering how PHEDC arrived at the figure when about ninety per cent of the buildings in the capital city do not have meter to determine the actual unit consumed. An electricity consumer, who simply gave his name as Ebiotu said, “it is just an alibi for the poor services being rendered. How do you expect us to pay for light we don’t see and do you justify the crazy bills they are sending to us when we don’t have meters in our homes.” Sweet Crude investigation showed that with most of the buildings not having meters, the company currently relies on estimated billing which most electricity consumers are not comfortable with and this is partly responsible for consumers’ reluctance to settling their bills. The N5.1bn figure was contained in details released by PHED in Yenagoa on the issues facing electricity supply by the company to the state. According to the statement signed by the M a n a g e r, C o r p o r a t e Communications, PHEDC, Jonah Iboma, the huge debt has impacted negatively on the growth of Yenagoa Business Unit in particular and the overall performance of the company which came into existence just over a year ago. He said the indebtedness cuts across various categories of customers. Available record shows that out of 4,977

Yenagoa customers owe N5.1bn electricity debt—PHED …blames poor services on huge debt

Electricity workers

pre-paid customers, only 183, representing less than 4 percent are vending. Though most of the buildings were yet to be installed with meter the details stated, “What this suggests is that the rest of the customers must have tampered with their meters thereby engaging in energy theft which has accounted for energy losses. “In the same manner, of the

customers using analogue meters with a total population of about 10, 669, only 2,681 are paying electricity bills.” He added, “The energy Yenagoa is receiving is not at all commensurate with its payment. For instance, in October, 2014, Yenagoa received N17,782,270 worth of energy, the highest among the 15 Business Units under the licensed area of the

It is pertinent to note that no company survives under hostile conditions and therefore, appeals for customers’ prompt payment of electricity bills and the enabling environment for its sustainability and growth

company’s coverage; but it was only able to account for less than 40 percent of this.” Closely followed in this regard he said, was Trans Amadi Business Unit that had 15,034,150.00 worth of energy within the same period under review and it was able to account for 92 percent payment. “Another challenge the company is facing is the problem of vandalism. In Yenagoa alone, PHEDC has lost 15 transformers to the nefarious activities of the vandals. It is no longer news that they drain oil from such transformers even when in circuit, removal of armoured cables of various sizes, removal of aluminium conductors, among others,” he lamented. Areas affected by the equipment vandalism he said included Opolo, Ovom, Igbogene among others. “In fact, in the four states that PHEDC is operating, it

has lost about 196 transformers. Community hostilities are a daily occurrence as many people still see electricity as a national cake that must not be paid for. “The company has faced a lot of resistance arising from this erroneous perception that electricity is free. Between June and November 2014, PHEDC staff members have been physically assaulted at the following areas in Yenagoa, Tennacious Road, Edepie, Others he said are Wilcox Street Opolo, Imiringi Road, Etegwe and NEPA Road, Opolo.. “It is pertinent to note that no company survives under hostile conditions and therefore, appeals for customers’ prompt payment of electricity bills and the enabling environment for its sustainability and growth,” he said.